Brett Vye, CEO of Molson-Coors/Hexo cannabeverage maker Truss, predicted infused beverages would ultimately represent between 20% and 30% of the total REC market.
- Vye said Truss, with its Molson-Coors connection, was a company of “beverage specialists, not beverage generalists,” as opposed to its principal competitor, the combined forces of Canopy and Constellation.
- US markets, where beverages have been legal for some time, have seen nothing like that market share for beverages.
- According to BDS Analytics, demand for beverages in 2018 in the California market (roughly the same size as Canada) was low, though beverages are growing in popularity year over year. Dry flower held 38% of Californian market share last year, concentrates held 33%, and ingestibles made up only 12% (that category was led by candy, tinctures, and chocolates, with beverages coming later).
- “Is it possible? Well, even leprechauns are possible; but I don’t see it,” said food-and-beverage consultant Brian Sterling, who noted beverages represented 1.1% of cannabis sales in the US in January and February.
Globe and Mail
- On St-Jean Baptiste Day, Quebec’s “national” holiday, celebrants in Montreal were allowed to enjoy the city’s municipal celebrations with a joint in hand. In Quebec City, the Commission des champs de bataille nationaux (The Commission of National Battlefields) has prohibited use of cannabis on its land, including the Plains of Abraham, where the party is held. It isn’t just cannabis—they also banned alcohol, all liquids, cans and bottles, water-guns, studded clothing, balls of any kind, umbrellas, and musical instruments. That’s why people come to Montreal to have a good time.
Journal de Montréal, TVA Nouvelles
- In the frenzy of invoking closure to push through two controversial bills cutting immigration and banning those who wear religious symbols from a variety of jobs serving the public, Quebec’s CAQ government ran out of time to raise the age for cannabis consumption. As a result, adults between 18 and 21 will still be legally allowed to buy and consume cannabis over the summer until the National Assembly reconvenes in August.
- The Canadian Chamber of Commerce has established the National Cannabis Working Group with a variety of major LP and REC retail partners to “improve the sector’s competitiveness,” though with membership costing between $5,000 and $10,000, brand strategist Rachel Colic said small businesses would be kept out.
MJ Biz Daily, Twitter
MarketWatch‘s Max Cherney wondered what will happen to Linton’s plans to give employees options and to keep Canopy headquarted in Smith’s Falls. He added, “Does Constellation have any idea how to run an early stage pot company? I mean Canopy can’t even sell edibles or vapes yet.”
- Financial executive Norman Levine said, “Canopy will now be a Canadian company in name only. Decisions will be made by Constellation and they will name executives and eventually move the operating head office to the U.S. but leave Smiths Falls as the nominal head office.”
- Tributes to Linton were widespread from across the sector, but grower Travis Lane summed up the feelings many legacy growers share about Linton: “He helped build one of the first inevitable massive North American cannabis corps in a market vacuum [but] almost anyone could have done a better job of publicly representing cannabis. Drones, dispos, fentanyl contaminated weed, shit product, etc. He may have been great for shareholders, but I didn’t see him help otherwise.”
- During a Bloomberg interview about the firing, Linton wore a t-shirt advertising communications-networks company Martello Technologies, which he and Mitel-chairman Sir Terry Matthews took public on the TSX last fall, and of which he is co-chair. As a result, Martello’s stock spiked by 89%.
Ottawa Business Journal, Financial Post
- Linton told Bloomberg he wants to make Martello “really crank.”
- Coming Monday in the WeedWeek newsletter, an exclusive interview with Kevin Murphy, CEO of Acreage Holdings, the U.S. company Canopy planned to acquire for US$3.4B when U.S. legal conditions allow.
On May 26, amicus briefs from the National Cannabis Industry Association and the Marijuana Industry Group—in collaboration with the Cannabis Trade Federation action group—were filed in the Ninth Circuit U.S. Court in support of the Oakland dispensary Harborside‘s tax appeal.
The letters offer the sort of persuasion it will take to get Section 280E of the U.S. Tax Code declared unconstitutional. Harborside is appealing a U.S. Tax Court decision from 2018.
WeedWeek reporter Hilary Corrigan examined the case:
- Harborside is contesting its bill for the tax years 2007-2012. The company argues that personnel and quality-control costs; curing, storing and guarding inventory; and trimming, manicuring and packaging should all be deductible.
- The NCIA argues, 280E, which dates from the early 1980s, “intended to punish criminal drug operators by stripping their ability to claim deductions on their tax returns. So, while ordinary businesses can deduct expenses such as rent, wages, taxes, and license payments, under § 280E lawful state marijuana dispensaries are taxed by the IRS on revenue before accounting for those expenses. This provision has the effect of subjecting State-sanctioned marijuana businesses—like Appellant Harborside Health Center (“Harborside”)—to unprecedentedly high effective tax rates of up to 75%.”
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